$2.2b loan deals to be signed with World Bank during PM’s Washington visit

The agreement signing ceremony will be held in the presence of Prime Minister Sheikh Hasina as part of the celebration of 50 years of partnership between Bangladesh and the World Bank, officials at the Economic Relations Department (ERD) said.

Earlier, in January this year, Bangladesh and the World Bank celebrated their 50 years of partnership in Dhaka.

According to ERD officials, the loan agreements of five projects, including $500 million in budget support,  will be signed.

These are – Resilient Infrastructure for Adaptation and Vulnerability Reduction (RIVER), Bangladesh Environmental Sustainability and Transformation Project, Accelerating Transport and Trade Connectivity in Eastern South Asia – Bangladesh Phase 1, Sustainable Microenterprise and Resilient Transformation (SMART), and Green and Climate Resilient Development (budget support).

Prime Minister Sheikh Hasina is scheduled to visit Washington at the end of this month at the invitation of the World Bank Group President David Malpass.

The agreements will be signed at the World Bank headquarters in Washington on 1 May.

Before heading to Washington, Sheikh Hasina will be on an official visit to Japan on 25-28 April at the invitation of Japanese Prime Minister Kishida Fumio.

ERD officials said in the current financial year, Bangladesh was scheduled to get $250 million for the Green and Climate Resilient Development DPC and another $250 million under the Bangladesh First Recovery and Resilience DPC from the World Bank as budget support.

But, the budget support for the Bangladesh First Recovery and Resilience DPC will not be available as the conditions to get the amount was not fulfilled.

In this context, the government proposed to increase the amount of the Green and Climate Resilient Development DPC budget support from $250 million to $500 million, which the World Bank agreed to.

According to ERD officials, three of these projects were approved by the World Bank board meeting last year.

However, the loan agreements for these projects could not be completed as government approval was not secured in time. However, at a recent meeting of the Executive Committee of the National Economic Council (Ecnec), these projects received final approval.

According to officials from the ERD and the Planning Commission, the final approval for these projects was delayed due to a hold-up in sending the proposal for restructuring the project proposals, as per the decision made during the Planning Commission’s Project Evaluation Committee (PEC) meeting.

Subsequently, the ERD requested that the Planning Commission expedite the approval process for these projects. With a special initiative from the Planning Commission, the final approval process for these projects was completed.

Satyajit Karmaker, secretary of the Planning Division, told The Business Standard the government has finalised the approval process by giving priority to projects that were previously delayed in the approval process. Additionally, all foreign-funded projects will receive swift approval.

He further added that the government is prioritising foreign financing projects, in light of the current global situation.

$753.45 million for transport and trade connectivity

According to the World Bank, the $753.45 million Access Project in Bangladesh will upgrade the 43 km two-lane Sylhet-Charkai-Sheola road to a climate-resilient four-lane road, connecting Sheola Land Port with the Dhaka-Sylhet Highway.

The project will support digital systems, infrastructure, and more streamlined processes at Benapole, Bhomra, and Burimari land ports.

It will also support the modernisation of the Chattogram customs house.

$500 million for the River project

According to the World Bank, the Resilient Infrastructure for Adaptation and Vulnerability Reduction (River) project will help Bangladesh reduce vulnerability to riverine and flash floods by constructing over 500 multipurpose flood shelters, access roads, and climate-resilient community infrastructure.

$250 million for green investment

The Bangladesh Environmental Sustainability and Transformation (Best) Project will support the Department of Environment to strengthen its technical and administrative capacity.

The project will also support improving environmental regulations by curbing pollution and improving environmental quality. The project will pilot new financing mechanisms to promote green investments in targeted sectors.

$250 million to provide loans to entrepreneurs

Officials from the ERD stated that the Sustainable Microenterprise and Resilient Transformation (Smart) project, listed for loan approval, is yet to be approved by the World Bank board meeting.

However, the World Bank has confirmed that the project will be approved by the board meeting before the agreement signing on 1 May.

The project will receive $250 million from the organisation, which will be provided as loans to entrepreneurs.

However, the credit programme project will not require Ecnec approval as the project is outside the Annual Development Programme (ADP). The Palli Karma-Sahayak Foundation (PKSF) is implementing the project.

According to PKSF sources, loans under the project will be given to one lakh entrepreneurs from manufacturing, service-oriented and agriculture-based industries. These loans will be given to selected people from all over the country.

Entrepreneurs will get a loan of Tk2 lakh-Tk2.5 lakh on average. However, according to the rules of the Microcredit Regulatory Authority, entrepreneurs will get a maximum loan of Tk15 lakh.

So far, the World Bank has committed about $39 billion in International Development Association (IDA) financing in the form of grants, interest-free loans, and concessional credits to help Bangladesh overcome its development challenges.

With about $15.3 billion in financing for 53 ongoing projects, currently Bangladesh has the largest ongoing IDA programme, and the World Bank is Bangladesh’s largest development partner.

 

Source

Comments

No comments yet. Why don’t you start the discussion?

Leave a Reply

Your email address will not be published. Required fields are marked *